Advanced Tax Strategies for High-Income Entrepreneurs (Part 2)

Mastering Retirement Plans, Estate Planning, Multi-State/International Taxes, and Lucrative Exit Strategies

Hello, again my fellow wealth-builders!

Welcome to Part 2 of our comprehensive guide on sophisticated tax strategies for high-income entrepreneurs. If your annual profits comfortably exceed $500,000, or you expect them to soon, the tactics you’ll find here can provide major savings—potentially in the six figures when carefully combined. Part 1, explored how entity selection, income shifting, and strategic deductions can drastically lower your tax bill. Now, we dive deeper into advanced retirement plan options, estate tax minimization, multi-state and international complexities, and tax-efficient exits that can safeguard and compound your wealth for years.

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These are some of the topics you will unlock with the subscription:

• Tax-Efficient Business Structures Part 1 & Part 2

• Depreciation for Business Assets

• Advanced Real Estate Strategies

• Opportunity Zone Investing

• Navigating Long-Term vs. Short-Term Capital Gains Rates

• Advanced Tax Strategies for High-Income Entrepreneurs Part 1

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1. Retirement & Investment Vehicles: Going Beyond Basics

- Solo 401(k), Defined-Benefit, and Cash-Balance Plans

Solo 401(k) plans are a staple for self-employed individuals or owners with minimal staff: they let you contribute as both an “employee” and an “employer.” However, suppose your net business income pushes above $500,000 or $600,000 and you have only a few (or zero) full-time employees. In that case, you may unlock far larger contributions through a cash balance or defined-benefit plan.

Illustration

• Age: 52

• Net Self-Employment Income: $900,000

• Cash-Balance Plan Contribution: Up to $180,000 or more, depending on actuarial calculations

• Additional 401(k) Contributions: Another $30,000+ (including catch-up contributions if you’re over 50)

With each contribution, your adjusted gross income (AGI) shrinks, which can knock you down from higher brackets and reduce overall tax liability. Just be prepared for consistent annual funding commitments—if your income drops unexpectedly, the required contributions to a defined-benefit plan might feel burdensome.

“Supercharging” a Cash-Balance Plan

• Spousal Salaries: If your spouse legitimately works in the business, you could pay them a salary as well, enabling both of you to participate in the plan.

• Layering with Other Plans: Some high earners create a multi-plan approach, combining a cash-balance plan with a profit-sharing 401(k) feature for optimal flexibility.